1st LD Writethru: Cyprus denies reports about Russian military facilities in exchange for loans

Cyprus on Thursday dismissed international press reports that it offered Russia a naval base in return for the restructuring of an outstanding 2.5-billion-euro loan (about 2.80 billion U.S. dollars).

"These reports are utterly unfounded and are not based on fact," government spokesman Nicos Christodoulides told state television from Moscow.

He said Russia and Cyprus updated and upgraded an existing defense cooperation agreement which already contained a provision for the docking of Russian warships in Cypriot ports on certain occasions.

"These provisions have been extended to facilitate the docking at Limassol port of Russian warships participating in operations against terrorism, piracy and smuggling," Christodoulides added.

The renewal of the defense cooperation agreement was announced on Wednesday at a joint press conference by Russian President Vladimir Putin with Cypriot President Nicos Anastasiades, currently on a state visit to Russia.

Christodoulides said the defense agreement was entirely unconnected to the restructuring of the Russian loan given to Cyprus in mid-2012, months before Cyprus was bailed out by the Eurogroup and the International Monetary Fund.

The Russian Duma approved on Tuesday the restructuring of the 2.5-billion-euro loan extending its maturity from 2018 to 2022 and its grace period from 2016 to 2018.

It also lowered the interest rate of the loan from 4.5 percent to 2.5 percent.

Britain has made it known that it is not pleased with the presence of Russian warships at Limassol port which is separated by only a wire fence from an air base it maintains on Cyprus.

The Akrotiri air base, just a few kilometers from the city, provides air and electronic surveillance support to NATO operations in the region. Endit